VANCOUVER, Jan. 16, 2013 /PRNewswire/ - Pan American Goldfields Ltd. (OTCQB: "MXOM") (the "Company") acknowledges its receipt of Mr. Emilio Alvarez's recent Delaware lawsuit which seeks to force the Company to hold an immediate Annual Meeting of Shareholders. The Company is disappointed and confused by Mr. Alvarez's actions. Mr. Alvarez is a partner of Mr. Bruno Le Barber, a director of the Company. Messrs. LeBarber and Alvarez were both notified in writing on October 25, 2012 (more than two months prior to the filing of the Delaware lawsuit) of the Company's intention to hold an Annual Meeting in June 2013 following the filing of its Annual Report on Form 10-K for its fiscal year ending February 28, 2013. The Company has formally selected June 28, 2013 as the date of its Annual Meeting, and will petition the Delaware court to allow the Company to hold the Annual Meeting on this date.
The Company's financial condition has improved substantially since September 2009 when the current executive team assumed management of the Company. At the time of their appointment, the Company had a working capital deficiency of approximately $4.7 million and, because of its dire financial condition, was at risk of having its ownership interest in the Cieneguita project reduced from 40% to 25%. In contrast, as of November 2012, the Company's working capital position was a positive $1.09 million, an amount the Company expects will continue to grow in future periods. Furthermore, as a result of its new agreement with Minera Rio Tinto that was negotiated last year, the Company received 29% of the net cash flows from the pilot production activities at the Cieneguita project retroactive to March 1, 2012, and as of January 1st this year will receive 35% of future net cash flows. The positive impact of this new agreement is already being felt. As of December 31, 2012, the Company had cash and receivables of $1.14 million. We expect our financial position to improve further and revenues to continue to grow as this year's 35% interest is reflected and pilot production expansion plans are implemented.
For the first time in the Company's history, Pan American Goldfields now has a positive operating income and cash-flow (excluding exploration and development costs) which it plans to continue to primarily reinvest in the further expansion of the Cieneguita project and brown field exploration to its south. To ensure the continued improvement in its financial position, the Company has decided not to continue activities in Argentina and in relation to this Miguel Di Nanno has stepped down as president.
Since 2009, the executive team's negotiations on behalf of the Company have resulted in the Company's interest in the Cieneguita deposit and planned larger commercial operation doubling to 80%. The Company expects to complete a Preliminary Economic Assessment ("PEA") regarding the planned larger commercial operation at the Cieneguita project by the end of Q1 2013. The PEA should further inform shareholders as to the activities of the Company's management team and why the team remains excited about the Company's future.
The Company's management team believes that the timing of the Annual Meeting should be conducted so as to further the interests of all shareholders. They also believe it is critical that all shareholders are properly informed of the Company's current position and its future prospects so they are able to make decisions based on factual and complete corporate information. As a result, the Company believes that its shareholders should have the information contained in the PEA as well as the Company's Annual Report for the fiscal year ending February 28, 2013 prior to holding an Annual Meeting. The Company plans to provide both the PEA results as well as the Annual Report to its shareholders prior to its planned Annual Meeting on June 28, 2013.
About Pan American Goldfields Ltd.
Pan American Goldfields is a precious metals mining and exploration company. Its focus is the production of gold and silver and the development and expansion of its Cieneguita mine in Mexico's booming Sierra Madre gold-silver belt. The Cieneguita deposit contains a NI 43-101 compliant resource of 1.1 million Measured and Indicated gold equivalent ounces. This resource contains 20,087,000 Measured and Indicated tonnes grading 0.74 g/t gold and 51.8 g/t sliver and 453,000 Inferred tonnes grading 0.99 g/t gold and 34.2 g/t silver. M3 Engineering of Tucson is managing a PEA for a larger operation which is expected to be completed Q1, 2013. A feasibility study is planned to commence immediately following the PEA.
On behalf of the Board of Directors,
Neil Maedel, Chairman
Safe Harbor Disclosure
The information in this press release contains forward-looking statements regarding future events or the future financial performance of the Company. Please note that any statements that may be considered forward-looking are based on projections; that any projections involve judgment, and that individual judgments may vary. Moreover, these projections are based only on limited information available to us now, which is subject to change. Although those projections and the factors influencing them will likely change, we are under no obligation to inform you if they do. Actual results may differ substantially from any such forward looking statements as a result of various factors, many of which are beyond our control, including, among others, the timing and outcome of our feasibility study on our Cieneguita Project; the costs and results of our initial production activities on our Cieneguita Project; the future financial and operating performances of our projects; the estimation of mineral resources and the realization of mineral reserves, if any, on our existing and any future projects; the timing of exploration, development, and production activities and estimated future production, if any; estimates related to costs of production, capital, operating and exploration expenditures; requirements for additional capital and our ability to raise additional capital on a timely basis and on acceptable terms; government regulation of mining operations, environmental risks, reclamation and rehabilitation expenses; title disputes or claims against our existing and any future projects; and the future price of gold, silver, or other minerals. These and other factors can be found in our filings with the SEC. The Company undertakes no obligation to release publicly the results of any revision to these forward-looking statements to reflect events or circumstances following the date of this release.
SOURCE Pan American Goldfields Ltd.